[amp_mcq option1=”Grants to States and Union Territories” option2=”Interest Payment” option3=”Defence Expenditure” option4=”Major Subsidies” correct=”option2″]<\/p>\n
The correct answer is (b), Interest Payment.<\/p>\n
Interest payment is the largest item of current revenue expenditure of Central Government in the year 2008-10. It is the amount of money that the government pays to its creditors, such as banks and bondholders, on the loans that it has taken out. Interest payments are a major expense for the government, and they have been increasing in recent years. In the year 2008-10, interest payments accounted for 25% of the central government’s total expenditure.<\/p>\n
Grants to States and Union Territories, Defence Expenditure, and Major Subsidies are also important items of current revenue expenditure of Central Government. However, they are smaller than interest payment.<\/p>\n
Grants to States and Union Territories are the money that the central government gives to the states and union territories to help them meet their expenditure. Defence expenditure is the money that the government spends on its armed forces. Major subsidies are the money that the government gives to certain sectors of the economy, such as agriculture and fertilizer, to keep prices low.<\/p>\n
All of these items of expenditure are important for the government to function properly. However, interest payment is the largest item, and it is a major drain on the government’s resources.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Grants to States and Union Territories” option2=”Interest Payment” option3=”Defence Expenditure” option4=”Major Subsidies” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-4087","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n